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MEDLAR is a full services business law firm based in Tunis founded by two lawyers: Amina Larbi and Rahma Meddeb who have more than twenty years of experience acquired in leading international law firms in Paris and Tunis, consolidated by a recognized local experience in business law and in the day-to day companies’ activities.
The dual international and Tunisian culture of MEDLAR’s founding members provides the firm with a perfect understanding of the business legal environment and enables it to respond efficiently to the issues of each project in conformity with international standards of work.
With its interdisciplinary and talented team, MEDLAR offers to its clients a high quality legal support based on a high technicality combined with an excellent knowledge of the Tunisian market.
MEDLAR provides its clients with a tailor-made legal support, as close to their interests as possible in order to help them managing their day to day and/or punctual legal needs as well as their complex transactions and projects.
Located on the Mediterranean coast of North Africa, Tunisia has a prime geo-strategic position given its geographical proximity to Europe and historical links with certain neighbours like Algeria and Egypt as well as other continents such as Asia and the United States of America. The country has a population of a little more than 12 million as of January 2024, relatively young and widely educated, the active population represents a little more than 4 million people amongst which about 1 million are active women. Tunisia is well known as a country where women’s rights are protected. Women are highly educated and active in all professional sectors and occupy high ranking public official positions. They represent about 16% of the total members of the Parliament elected in March 2023. Arabic is the official language and French is widely used in education, the press and in business. English is widespread especially in business. Tunisia’s currency is the Tunisian Dinar (TND). Due to foreign exchange regulations (see below), the local currency is not fully convertible yet. A significant upgrade and amendment of the foreign exchange code is expected to occur to allow full convertibility of Tunisian Dinars in the near future.
Tunisia has been going through a democratic transition since 14 January 2011. The country has issued two constitutions. The first one was prepared by the National Constituent Assembly on 27 January 2014 and established an unstable parliamentary regime which led to political crisis. On 25 July 2022, a referendum was held which led to the adoption of a new constitution establishing a presidential regime. The Assembly of the People’s Representatives (the new parliament) whose members were appointed through a democratic vote, is in place since March 2023. Presidential elections were held on 6 October 2024 and President Kais Said was elected.
In 2023, Tunisia had a gross domestic product (GDP) of about USD 46.53 billion (its per-capita GDPs is estimated at USD 3895.4. The agricultural sector accounts for 9.5% of the GDP, industry 23.5% and services 62.1%.
The upgrade of the foreign investment legal framework in Tunisia started by the enactment of Investment Law on September 30, 2016, and was reinforced by the law N°2019-47 dated on May 29th, 2019, relating to improving the investment climate. Decree Law N° 2022-68 dated October 2022 set forth a series of specific rules intended to enhance the development of both private and state-owned projects (all together the “Foreign Investments Laws”). The objective of the Foreign Investments Laws is to promote investment. The latest changes to the Foreign Investments Laws aim to encourage projects which qualify as “public interest projects” and also facilitate the development of agricultural and energy projects and the extension of existing industrial and/or innovative projects. This includes the possibility of declassifying agricultural land and support for public private partnerships. In this context the Ministerial Council has established a draft decree for the development of a multi facilities project “la Cité des Aghlabides “in Kairouan to provide a specific legal and incentive framework for the project’s management.
The reforms of the Tunisian investment laws did not abolish the distinction between offshore and onshore projects. In all cases, the investment law established rule free investment and its provisions apply to resident and non-resident investors in all economic activities based on the Tunisian activities’ classification (“la nomenclature d’activités tunisienne”). The Tunisian investment law also established the rule of national treatment so foreign investors will be treated no less favorably than Tunisian investors.
Investments are either:
Like other countries in Africa (such as Senegal) or in Europe (such as France) who have recently and successfully put in place an attractive legal framework for young promoters/companies operating in innovative or high added value sectors, Tunisia has promulgated a Start-up Act by law 2018-20 dated 17 April 2018 to encourage the young private sector to launch their innovative projects under a special legal framework providing for tax and foreign currency incentives as well as other benefits (such as a range of financing instruments). The total number of start-up labels awarded in Tunisia in 2024 is 1018. The start-ups operate in diversified sectors such as market places, EdTech, FinTech, health, AI, wellbeing and agri-business. Exports represent about half of the start-up companies’ turnover mostly achieved in Europe and Africa.
The Government also actively encourages foreign direct investment (FDI) in key industry sectors such as IT, energy (in particular renewable energy), automotive, aerospace and aeronautics, textile manufacturing and tourism. In this context, Decree N° 2018-417 of 11 May 2018 dealt with the exclusive list of economic activities subject to authorisation and the administrative authorisations for the implementation of projects (as amended by the Presidential Decree N° 2022-317 of 8 April 2022):
New legislation is expected to be enacted in the near future to reduce certain administrative permits in various sectors.
In line with the strategy of improving the investment climate, law N° 2019-47 dated 29 May 2019 was published to unify rules for specific economic sectors. This law removed the requirement for a trade card (“carte de commerçant”) which was cumbersome to obtain for subsidiaries that exclusively distribute the products of their parent company (these distributed products must however be manufactured in Tunisia).
Since the promulgation in 2009 and 2010 of franchising statutes and implementation regulations, various sectors (such as retail) have been exempted from requiring prior administrative approval to open their franchise in Tunisia. As a result, many franchises now have the ability to operate like any other business.
In order to encourage renewable energy projects and the extension of industrial projects, the possibility of changing land zoning from agricultural to industrial before project implementation (“le changement de vocation des terres agricoles”) (which used to be a long and complex procedure) has been significantly facilitated by Decree Law N° 2022-68 dated October 2022.
The State has also authorised foreign direct investment in certain traditional State monopoly activities (such as electricity production and distribution). The private sector may now participate in self-generation projects involving renewable energies connected to the national network of high and medium voltage. Public and private entities operating in the industrial, agricultural or services sectors can also produce electricity from renewable energies for self-consumption purposes, and companies can be created for the purpose of the production and sale of electricity from renewable energies within certain limits. Such public and private entities benefit from the right to sell the electricity produced to self-consumers whose subscribed power exceeds a minimum level set by the Minister of Energy. They also have the right to transport the electricity produced through the national electricity grid to consumption centres and the right to sell surpluses to a public body subject to certain maximum rates and within the framework of a standard contract approved by the Minister of Energy.
The Investment Law issued on 30 September 2016 was completed by a series of decrees enacted in 2017 to establish the authorities (notably the Conseil Supérieur d’Investissement (Higher Investment Council and the Instance Tunisienne d’Investissement (ITI) (Tunisian Investment Authority)) to supervise the award of incentives and to analyse the eligibility of projects for incentives. A management unit was also created within the Ministry of Investment to enable the review of project authorisations (if necessary) for conducting economic activities. The implementation decrees of the Investment law also provided for various investment rewards/premiums and incentives (“primes et incitations”) such as a reward for increased value add and competitiveness, a regional development premium based on a regional development index in certain activities for the realisation of direct investment operations or expenditure on infrastructure works and a sustainable development reward for investments made to fight pollution and protect the environment.
The law also provides for certain incentives for projects of national interest such as a deduction of profits from the corporate tax base for up to ten years, an investment premium of up to one third of the investment cost (including expenses) for infrastructure works “intra-muros”. Projects of national interest are projects meeting one of the four objectives of the Investment law which have an investment cost greater than or equal to fifty million Dinars or that are creating a minimum of 500 jobs over three years.
The main business entities in Tunisia are limited partnerships (called société à responsabilité limitée (which can now be founded by a single shareholder) and joint-stock corporations (called sociétés anonymes)(SA).
The Government has been actively working on making the creation of companies in Tunisia easier. A new law was published relating to the National Registry of Enterprises commonly referred to in Tunisia as RNE (Law N° 2018-52 of 29 October 2018). Every company has a unique identification number which corresponds to its tax identity number. No other numbers are used to identify enterprises in Tunisia. The first step to create a company is to book a name with the RNE, which can be done online. The creation of a company cannot be accepted without completing the effective beneficiary form which is a new notion introduced in the Tunisian legal system for companies. Other additional steps are required to be followed with tax and social administration, but the existence of a unique window (“Guichet unique”) to handle basically all steps for the creation of a company, highly facilitates the process.
Foreign capital transactions are governed by the Law N° 76-18 dated 21 January 1976 (as subsequently amended) and by Central Bank of Tunisia Circulars which are enacted from time to time (collectively “Forex Regulations”). Such control is exercised over investments made in companies operating in regulated sectors. Also, transactions involving payment of hard currency abroad are subject to the Forex Regulations unless they are classified as “current transactions “. A new Code is expected to be promulgated shortly in order to consolidate all exceptions as and progressively liberalise the Forex Regulations in particular to facilitate investments by foreign entities in Tunisia in various sectors and the extension or development of local operators’ activities abroad.
As a general rule, companies are subject to a flat tax rate of 15% on net profits. The rate is 10% for agriculture and fishing companies. Profits generated from exports are subject to corporate income tax at a rate of 10% for legal entities and are partially deductible from taxable profits for natural persons. Dividends distributed by a company to non-residents are taxable at the rate of 10% (25% for certain residents). Furthermore, investments made by a company in some categories of entity which enjoys tax incentives are deductible from taxable income. Since 1994, remuneration paid by a company to its directors is taxed. Fully exporting companies are exempt from registration duties.
Value-added tax (VAT) is an indirect tax introduced in Tunisia in 1988 and applies to all industrial, handicraft and services businesses except agriculture. VAT paid on purchases is deductible from the VAT collected on sales turnover. The rates are:
The transfer of real property located in Tunisia is subject to various registration fees:
The land registration tax is another indirect tax levied at a rate of 5% of the value of real property acquired. Inheritance and donations tax are calculated at rates ranging from a fixed duty to 35% depending on the circumstances.
Interest is subject to a:
Royalties are subject to a 15% withholding tax when paid to a non-resident (unless the rate is reduced under a tax treaty). However the rate is raised to 25% if it concerns a resident of states in territories with a privileged tax regime.
Stamp duty is levied on most contracts, agreements, and documents subject to registration. Administrative and private documents relating to business are also subject to this tax. Its rate depends on the nature of the relevant transaction. Social Security contributions are set at 25.75% of the monthly gross salary of the employee divided as follows:
Consumption taxes vary depending on the item. For example, the fuel consumption tax is 8,190 Dinar/100 Kg. Local municipality tax (TCL) ranges from 0.1% to 0.2% depending on the activity. Professional training tax is payable at 1% of all salaries paid to employees of manufacturing industries and 2% for other industries.
According to the Tunisian Labor Code (Articles 364 and 365), each company is required to pay a training professional tax (TFP) based on its payroll (at a rate of 1% for manufacturing companies and 2% for other economic activities). Agricultural enterprises, exporting companies and those subject to a flat tax on patents, are exempt from this tax. This tax is intended for the ongoing training and skills enhancement of the company’s personnel. Companies can be reimbursed for expenses incurred for approved training.
A ministerial order from the Minister of Finance and the Minister of Employment and Youth Integration dated 10 February 2009, set out areas for the use of advances on training professional tax, the criteria and amounts for financing related training activities as well as the maximum amounts for the utilisation of drawing rights for financing such training activities.
Tunisia has a court system influenced by French civil law. Civil disputes are heard by First Instance Courts, may be appealed to the Courts of Appeal, and later brought to” cassation” at the Court of Cassation (the supreme court). It is important to note that cassation is not a third level of litigation. The highest Court ensures that decisions comply with the law. Court litigation is more popular in local commercial disputes especially when the parties are small to medium size enterprises and when there is no arbitration convention concluded between the parties. In sophisticated transactions involving confidential commercial information, the parties would tend to adopt arbitration dispute resolution mechanisms to avoid bringing their cases before courts. Even if these parties are of Tunisian nationality, they very often agree on institutional arbitration like the International Chamber of Commerce (ICC) in Paris or in Tunis (noting that the seat of the arbitration would determine the court of appeal that would be competent).
Employment disputes are heard by the labour chambers that do not require the presence of an attorney and has simplified procedures.
If the State is party to an international commercial contract which does not involve assets related to the exercise by the State of its sovereignty, then the State is authorised to accept arbitration clauses in the contract.
Intellectual property protection covers patents, trademarks, industrial designs, copyright (literary and artistic property) and layout designs of integrated circuits.
Since 28 November 1975, Tunisia has been a member of the World Intellectual Property Organisation (WIPO). The country is a signatory to a number of international as well as regional conventions on intellectual property such as the:
Tunisian intellectual property laws are consistent with international standards and aim to provide adequate protection to owners.
Tunisia has recently acceded to the Protocol Amending the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), adopted in Geneva on 6 December 2005. This accession was approved by Organic Law No. 2024-30, adopted by the Assembly of the People’s Representatives on 5 June 2024. The adoption of the TRIPS Protocol Amendment will enable Tunisia to develop its pharmaceutical industry sector and addresses several issues related to the system of compulsory licenses such as the prohibition on the export and import of pharmaceutical products (protected by patents) and their use only in the local market as well as granting licenses exclusively in cases of national emergency or extreme urgency.
A data protection statute promulgated in 2004 is subject to a draft amendment (Law N° 2004-63) since 2016. The recent political changes may be the principal reasons for the delays. The regulatory authority however remains significantly pro-active in this field and renders its advice on a regular basis to clarify the practical aspects of the law considering new and existing technologies.
On 6 February 2024, Tunisia enacted a new law against cybercrime. This law approves Tunisia’s accession to the Council of Europe’s Convention on Cybercrime which was adopted in Budapest on 23 November 2001. The convention was ratified by Tunisia through Decree No. 2024-98 of 6 February 2024.
In the same context, Tunisia adopted Decree-Law No. 2022-54 on 13 September 2022, concerning the fight against offences related to information and communication systems. This decree-law serves as a means of preventing and prosecuting offences related to information and communication systems, as well as those concerning the collection of electronic evidence. It also aims to support international efforts in this area within the framework of international, regional, and bilateral agreements ratified by Tunisia.
Tunisia has enacted a law (Law N°2020-30 dated 30 June 2020) dedicated to the social and solidarity economy (ESS Law) to set forth an economic model which includes a range of activities aiming to achieve social purposes. The purpose of this new legislation is to enhance, through the grant of incentives to agricultural cooperative companies or similar structures operating in the agricultural and fishing sectors, social and territorial stability and provide decent conditions of life and work.
This legal framework has been completed recently by Decree Law N° 2022-15 of 20 March 2022, relating to community companies. The purpose of this Decree-law is to institue a legal regime specific to community companies, which are based on collective initiative and the common good.
The total number of community companies created in Tunisia since the publication of the Decree-Law is 77, including 61 local companies and 16 regional companies (statistics made by the RNE/ updated number on August 15,2024). Most of the community companies are created in the agricultural sector but other companies operate in the industrial, tourism, textiles and leather sectors.
Employment relations in Tunisia are governed by the Labour Code of 1956 and collective bargaining agreements. Labour contracts may be for a definite or an indefinite period. A definite period contract may specify that it is valid for either a limited period or for a specific task. If the fixed term employment contract is still effective after the agreed expiration date, it becomes a contract for an indefinite period. A labour contract may be terminated by agreement between the contracting parties or because of resignation or dismissal of the employee. In the latter case, the employee is entitled to severance package that differs on a case-by-case basis.
The Labour Code sets standards regarding other employment conditions, such as the minimum age of labour (16 years) the maximum number of work hours per week (48 hours), the minimum wage level, starting from 1 May 2024, is set at 491.504 Dinars for a 48 hour work week. For a 40 hour work week, it has been increased to 417.558 Dinars. Regional labour inspectors are responsible for the enforcement of such regulations. Worker health and safety standards are regulated and enforced by the Social Affairs Ministry. Social security payments in respect of Tunisian employees are paid by the employer who contributes 25.57% of the employee’s wage and deducts 9.18% from the employee’s wages to be paid on the employee’s behalf.
The law providing incentives to foreign investors has wide provisions permitting expatriate personnel. For example, foreign managers acting in their capacity as employers are not required to hold a work contract and their company or enterprise may, with a simple declaration to the appropriate authorities, hire up to four expatriate technicians who may choose either a foreign social security system or the Tunisian system.
The right of workers to form unions and perform strikes is secured by article 41 of the newly adopted constitution of 2022 and the Labour Code. The right of unions to strike is conditional upon the fulfilment of certain conditions, such as giving ten days advance notice and receiving the support of the Central Labour Federation (UGTT). However, the military and all armed forces (like the police and customs, border protection officials) as well as judges are not allowed to strike in terms of the constitution. Tunisian law protects the right to organise and to bargain collectively. Working conditions (such as wages) are fixed through the negotiation of approximately forty-five collective bargaining agreements, which determined standards applicable to entire economic sectors. The Government must confirm the collective bargaining agreements and cannot modify them. After Government confirmation, the agreements are published.
Membership of International and Regional Organizations
Tunisia is a member of the World Trade Organization (WTO), the United Nations (UN), the United Nations Conference on Trade and Development (UNCTAD), the World Intellectual Property Organization (WIPO), the African Union (AU), the International Monetary Fund (IMF), a shareholder in the European Bank for Reconstruction and Development (EBRD) among other international and regional organizations. Tunisia adhered to COMESA (the Common Market for Eastern and Southern Africa) in July 2018 and such adherence became effective upon its approval by Law n° 2019-33 as of 10 April 2019.
Tunisia is making significant efforts to strengthen its ties with Africa, particularly through its engagement with both the AfCFTA (African Continental Free Trade Area) and COMESA (Common Market for Eastern and Southern Africa).
Tunisia’s membership of COMESA, began in July 2018. Organic Law No. 2024-12 enacted on 22 February 2024, approves an agreement between the Government of Tunisia and COMESA concerning the hosting of COMESA meetings, workshops, and activities in Tunisia. This agreement exempts COMESA’s activities from VAT in Tunisia and marks a pivotal moment in the country’s regional economic relations. Since its publication, the law has already yielded positive results in the relationship between Tunisia and COMESA.
In this context, two workshops have already taken place in Tunis. One titled “The COMESA Free Trade Area and Regulations on the Elimination of Non-Tariff Barriers (NTBs) held in May 2024 addressed key topics such as the COMESA Free Trade Area (FTA), trade facilitation tools and NTB regulation. Participants received training on monitoring and reporting NTBs, and a National NTB Work Programme for Tunisia was developed. The workshop aimed to raise awareness among Tunisian stakeholders about trade opportunities within the COMESA FTA, enhance their understanding of NTB management and support Tunisia’s active involvement in regional integration initiatives. Tunisia also hosted COMESA Investment Forum (CIF 2024) in June 2024. The forum offered a platform for promoting trade and investment within the COMESA region, bringing together high-level political leaders, business executives, investors and industrialists from across the region.
Equally significant is Tunisia’s engagement with the AfCFTA, launched in January 2021 by the African Union. This initiative aims to boost intra-African trade by lowering tariff and non-tariff barriers, thereby fostering a single market for goods and services and promoting socio-economic development. The AfCFTA seeks to cover 54 African countries with a combined population exceeding 1.3 billion and a GDP of USD3.4 trillion.
Since March 2023, Tunisia has created a national committee to oversee AfCFTA negotiations with 93 export transactions already conducted under this framework. Key initiatives include establishing the African Center for Digital Trade, proposing to host the African Regional Intellectual Property Organization (ARIPO) and launching a trade corridor between Tunisia, Libya, and Sub-Saharan Africa.
Tunisia has issued 93 certificates of origin as part of the AfCFTA agreement, facilitating exports of chemical products, agricultural food items and semi-automatic machinery to countries such as Cameroon, Ghana, Tanzania, and Mauritius. These certificates are crucial for exporters to enjoy reduced customs duties, which will take full effect from 1 January 2026.
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